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Nine candles and ten months


 

This excellent article in the Globe and Mail, bearing the fingerprints of no fewer than five reporters, details CanWest’s difficulties and suggests two possible solutions: the Aspers, and apparently Leonard more than the others, might take the company private; and the company might cut the National Post loose. Senator Jerry Grafstein is listed as a possible buyer.

This news has already inspired the usual snickering from the usual suspects. It’s unfortunate that, along with the rest of their yeoman labour on this CanWest story, the Globe‘s armies weren’t also able to do what Richard Pérez-Peña, a very fine New York Times reporter working these days on the media beat, was able to do singlehandedly: put the troubles of one media corporation into a little perspective. A lot of media companies are in profound trouble — Pérez-Peña cites several cases of market capitalization falling by more than 90% in a year and a half. So several of the English-speaking world’s most venerable news outlets could be bought for a song tomorrow, if only any buyer could believe they won’t simply decline in value still further.

This simple circumstance makes a lot of the commentary on the Globe’s comment board and elsewhere look comically parochial. Boo-hoo, boo-hoo, I don’t like Jonathan Kay’s editorial page, so that explains it. Frankly I think Jon Kay’s editorial page can be pretty knee-jerk too, with the occasional and honourable exception of Jon himself, but unless there’s a connection I haven’t been briefed on, he’s not the guy who piddled away 99% of the value of the New Haven Register in 18 months. It’s almost as though something else was going on. Like, I don’t know, maybe some kind of magic pipeline was giving people access to information for free, at any distance, that they used to pay a local newspaper to provide. Or something.

Anyway, let’s assume there is fire where the Globe team spotted smoke, and the Aspers are looking to get rid of the Post. It would indeed rid CanWest of some losses, though barely a fraction of what’s needed to rescue the company. But it’s hardly clear how the surgery would work. The Post comes attached to a country-wide (well, Montreal on westward) chain of newspapers, and it has announced a divorce from the Canadian Press news-gathering collective. Neither the Post nor other member papers have autonomous reporting staff in Ottawa any more; a new Post buyer would basically have to staff Ottawa up from zero, or allow CanWest News Service to make most staffing and coverage decisions for the paper, which calls into question the logic of a purchase, if there ever was any such logic.

As for potential buyers, Grafstein’s name makes some sense, both because he was an early driver behind CityTV and because this isn’t a new rumour: our friend Antonia Zerbisias reported on it three years ago, linking Grafstein to Gerry Schwartz and Ray Heard. I’ll leave it to readers to judge whether those names suggest the level of wit and imagination a struggling newspaper needs.

The Post was launched with a mandate to create buzz and attention, and worry about the bottom line later. When later came, Black had already sold the paper, and the new owners blew a huge chunk of our hard-earned goodwill by cutting nearly a third of the paper’s daily pages. They were astonished when circulation, which had pulled to within shooting distance of the Globe‘s, collapsed. It has never really recovered, even though a skeleton editorial staff now puts out close to the previous number of pages.

The Post‘s arts pages still easily beat the Globe‘s on most days. There is often strong reporting throughout the paper. The editors have decided to own the political right and to forfeit the rest of the spectrum to competitors. But frankly the paper’s strengths and weaknesses never had as much to do with political orientation as its fiercest critics and defenders like to believe. In an ordinary market, it would be possible for the Post to struggle ahead of its current position with a small number of fairly low-cost changes. In the current market, it’s less obvious how even that modest fight-back could be accomplished.


 

Nine candles and ten months

  1. If only someone had been able to forecast in 2000 that the Internets might become popular and that print media was dying! All could have been salvaged!

    “Usual snickering” is called for in this case, because usual snickering is all the Post ever gave to the Toronto Star, a regional paper which whooped its national behind on a consistent basis. The entire schtick of the Post — bitching about the Star, trying to out-Steyn Steyn, espousing its “libertarian” credentials, running three-day-old Hitchens and Krauthammer pieces — is so self-conscious and attention-hungry that one can’t help but laugh a little bit. If anything, the demise of the Post and the Western Standard is reassuring of the fact that the kind of wingnut welfare that has kept the Weekly Standard and Washington Times afloat doesn’t have legs in Canada.

  2. “The editors have decided to own the political right and to forfeit the rest of the spectrum to competitors. But frankly the paper’s strengths and weaknesses never had as much to do with political orientation as its fiercest critics and defenders like to believe.”

    I would have taken out a Post subscription long ago if I had had any hope of seeing a range of viewpoints on its editorial pages. Not because I dislike right-wing views per se (at least if they have some respect for reason), but because a completely uniform set of opinions is *boring*. They would have been (would still be) much wiser to open their columns to a variety of unusual (non-Globe) political views. Part of the Globe’s strength at present is that Salutin fans, Wente fans, rabid Newfie fans, and Blatchford fans all buy it, in addition to the reasonable Simpson fans. The Post, by contrast, has made even Robert Fulford sound like recycled Will/Krauthammer. It’s like an auto dealership selling only purple cars.

  3. When you start running OpEds by people whose other writing credits include Vanguard News, when you start promoting people like Marc Lemire as free speech “heroes”, then you have ceased to function as a real news outlet and instead become the focal point of a weirdo cult.

    Maybe I’m one of the usual suspects, but baby, snickering don’t cover half of what I’ve been doing the last couple of days.

    Speaking of weirdo cults, what happened to Steyn’s columns? Haven’t seen one of those here in weeks.

  4. From the Times article:

    “This is no isolated case. While all publicly traded newspaper companies have seen their share prices fall in the last year — drops of 50 to 70 percent are commonplace — some have tumbled so far that any number of bargain hunters could snap up a controlling interest, despite the credit squeeze. But they haven’t…

    “The market capitalization of the Journal Register Company, publisher of the New Haven Register and hundreds of smaller papers, fell below $1 million last week, down more than 99 percent since the start of 2007. In the same period, GateHouse Media, another publisher of hundreds of small papers, has dropped almost 98 percent, to a market value under $26 million. The Sun-Times Media Group is down 91 percent, to less than $34 million.”

  5. “drops of 50 to 70 percent are commonplace”

    So a drop of 83% is perhaps particularly ghastly?

    Snicker.

  6. I agree that article should have looked at entire Canadian newspaper industry because as is, it comes across as schedenfreud. You could write a similar article about TorStar if it wasn’t for the Harlequin division making loads of money.

    I think the problem for the Post is that it’s neither fish nor fowl. It isn’t particularly conservative anymore, except for its excellent work on free speech issues, and it’s not progressive either. They seem to be competing for Globe readers.

    It would be a shame if CanWest disappears entirely. Lots of news sources, with different view points, is important in a democracy. They help keep MPs and bureaucrats honest and they shine light on troubling things in our society.

  7. I rarely read the National Post, but I was wondering how they covered events in Ottawa without the Canadian Press or “autonomous reporting staff in Ottawa”.

    The Ottawa Citizen?

    And how prohibitive are CP membership fees to justify CanWest’s decision? I was under the impression that it was 4-5 million for the CanWest group.

  8. Like Time and Elle, it looks like the National Post has found that “It’s not easy selling green” and should perhaps suggest to Terrence Corcoran to stop being so pro-environment.

    But, Wells is right, perspective is important – it’s just that I’m not sure comparing a national newspaper in Canada with “the New Haven Register and hundreds of smaller papers” is the appropriate proxy. I’m no newspaper person, but it would seem to me that, in a general or even regional downturn in the US economy, local advertising from local businesses would be more susceptible to being cut back, no?

    The perspective that is missing in both the G&M piece and this blog is the financial history of the National Post since its inception. I was under the impression that Black lost a pantload from its inception, until he unloaded it on the Aspers (at its peak value I thought), and that the paper has never turned in its history an operating profit, even through strong economic times, notwithstanding any trends to free internet content. I stand to be corrected.

    A weak balance sheet, with $3.7 billion of debt, puts its market cap at particular risk if decreasing ad revenue limits its ability to service the debt, as the G&M article pointed out.

    Unfortunately, this can lead to a death spiral – cutting content and other cost reducing measures, which makes the paper less appealing to readers and hence advertisers, which leads to more cuts, which leads to…

  9. Wassim, the Post, like all CanWest papers, relies heavily — by now, nearly exclusively — on CanWest News Service reporters. As long as they’re all one chain, that’s a distinction without a difference. But if only the Post were sold, it’d become a big problem. Meanwhile The Gazette is becoming the last large CanWest paper to close its autonomous Ottawa bureau, but that’s a gripe for another day.

    I’m not sure what CP costs, and I understand the desire for a national paper to want its own voice (even if it’s, er, shared with the rest of CanWest), but there could hardly be a worse time to turn a news company’s back on CP, because under Rob Russo it’s easily the strongest newspaper bureau in Ottawa. Thanks in no small measure to Rob’s insight in hiring a handfull of dismissed former CanWest reporters. This is part of what I meant when I said ideology didn’t explain the bulk of CanWest’s problems, but I knew that argument was unwinnable before I made it.

  10. “The Post comes attached to a country-wide (well, Montreal on westward) chain of newspapers”

    The Aspers spun-off a lot of the profit-producing papers in the income trust vehicle some time back. That trust is still making money, I think.

    The reason many snicker at the Aspers is (a) because they’re not their father, yet another reminder of the virtues of good corporate governance; (b) they have been lecturing the rest of the country on sound fiscal management for years; and (c) the Torstar group and CTV/Globemedia have been doing rather well.

    The problem with Canwest is not the industrywide downturn in newspapers or the declining ad revenues due to a slowing economy. Their problem is that they bought assets at high prices, financed with debt, and are now stuck with them.

  11. Dot, you’re right, the Post has never turned a profit. It was launched with a strategy of making a splash with utter disregard for the bottom line, and by that measure, it was a stellar success.

    Small joke.

    A look at the history of USA Today would show a very similar trajectory, for the first several years. But USA Today had proprietors who could stick with the investment for longer, and it stabilized in the late 1980s, in the absence of devastating competition from online news sources. The Post would have had to rein in spending sharply by the mid-’00s anyway, and anything I might say about how they did that would be pure back-seat driving. But ‘death spiral’ is an excellent term: the only defence against this industry-wide meltdown, and it’s not a certain defence, is steady investment in journalistic quality. Why is the Globe standing up pretty well? Because despite my frequent gripes, it’s where you flee in Canadian daily newspapers when you want to flee to quality. What’s the only hope for the Post? To become a better newspaper, by extremely old-fashioned definitions of what “a better newspaper” would look like. Their newsroom is still crawling with reporters who are absolutely up to the task, but they could use some help, and their commanders-in-chief are diligently pursuing a long-term strategy of sending just enough soldiers to lose.

  12. If I was in charge of the Post and had to turn it around I would do three things:

    1) Beef up reporting, like Wells is on about.

    2) Focus on writing ability. Someone mentioned Steyn earlier in this thread and he’s a high school dropout with no journalism background but has become probably the single most well known opinion writer in the world.

    3) Develop a muckraking mentality. There are far too many shibboleths here in Canada and they need to be challenged. Consensus is way overvalued and we need more journalists willing to take on the establishment. I find newspapers and political tv shows to be awfully milquetoast, it seems like they don’t want to offend or something.

  13. Perhaps the MSM/journalists…have lost their way.

    What ever happened to the “voice of the people”. It’s nearly all opinion, very little reporting or investigative reporting on what affects us.

    It’s about bias and partisanship and an attempt to manipulate minds…..

    Oh to have some decent journalists….where did they all go?

    (Mr. Wells – you and one of my favourites, Kady – are an exeption, of course).

  14. In this day and age, in which everybody & his brother is eagerly joining comment threads, surely finding good content is the least expensive thing in the world. Vanity should have a great deflationary effect. I say: along with more reporting and muckraking (reasonably expensive), triple the size of the “Opinion” section and let a thousand flowers bloom (very cheaply).

    Moreover, in the age of the Internet, with its tendency to diffusion, legitimacy is at a premium and established media outlets like the Post could provide it. As it is, their website frontpage just gives me a lot of news I can find elsewhere instantly; looking for interesting content is like a needle-in-the-haystack quest. If good old-fashioned reporting sells physical newspapers, an irresistible online presence brings status in the Zeitgeist, sine qua nihil.

  15. Thanks for the Ray Heard reference, made my day.

  16. But I was subtle about it, wasn’t I?

  17. >Neither the Post nor other member papers have autonomous reporting staff in Ottawa any more

    Not quite. Until last month, a number of Canwest News Service reporters were still officially Ottawa Citizen employees (including Andrew Mayeda and Mike Blanchfield). They have now transferred over to CNS. But The Citizen still maintains autonomous reporting staff on the Hill, in the persons of Glen McGregor and Kathryn May.

  18. Big mistake. Sorry.

  19. My problem with the Post has always been that they long ago gave up on reporting to focus on opinion. It shouldn’t be that hard to write plain ol’ fashioned news articles, should it? To be honest, way up here in the middle of nowhere, I’ve given up on the newspapers as reliable source of national news. The Post was the only one that would deliver, and it wasn’t helpful. Right now, my local paper provides far more news content than does the Post. For national news, of course, I wait for Macleans, even if up here in NorthEastern Ontario the delivery is erratic.

  20. agree completely with sophie-marie. seeing the post on my last trip back home to canada broke my heart. it’s unreadable. There’s too much crap opinion out there in the world. The Post was at its best breaking stories about Shawinigate. It was even at its best running the first society party photo pages in Weekend Post to show that there is some semblance of a glamorous life to be had in Toronto (also breaking news, in its way).

  21. I know I posted something thoughtful, serious and civil here yesterday…

    Oh, well. Good thing I’m not invested in the integrity of Macleans all that much.

  22. Macleans readers should know that many of its staffers were groomed at the Post

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